We pledge to make the mortgage process smooth and transparent. We will be honest with you and return phone calls. We will get you the rate you have been quoted if you have instructed us to lock the rate at an agreeable figure.

THANK YOU FOR THE OPPORTUNITY TO SERVE YOU!

California Sees Dramatic Decline in Foreclosure Activity
California foreclosure activity plummeted in December, especially when looked at on a daily average basis, according to the monthly California Foreclosure Report recently released by ForeclosureRadar, a Website devoted to tracking every California foreclosure.

Notices of default dropped 17.5 percent in aggregate, but they actually dropped 32.5 percent on a daily average basis. This percentage difference is due to that fact that December had 22 days on which documents were recorded, versus only 18 in November. In addition, notice of trustee sale filings dropped 23 percent. ForeclosureRadar said this is not simply a regular season decline, as it has not seen a similar drop in recent years.

“The dramatic drop in foreclosure activity may have been a Christmas gift to homeowners,” said Sean O’Toole, founder and CEO of ForeclosureRadar. “However, given rising mortgage delinquencies, it is becoming increasingly clear that foreclosure activity no longer fully represents market realities.”

On an average daily basis, cancellations only increased 3.5 percent. Given the Obama administration’s drive to make trial loan modifications under the Home Affordable Modification Program permanent, this was a smaller increase than expected. Based on the timing of these cancellations, ForeclosureRadar believes 21 percent were cancelled due to statutory requirement that a foreclosure sale be held within one year, thus forcing a cancellation. In addition, tracking Website estimates 61.9 percent were likely due to some form of loan workout, and 17.1 were more likely the result of a filing error.

On a month-to-month basis, pre-foreclosure properties and foreclosure properties scheduled for sale decreased, but year-over-year these inventories saw huge gains. In December, pre-foreclosure properties fell 0.4 percent from the prior month but jumped 55.12 percent from December 2008. In addition, foreclosure properties scheduled for sale fell 2.64 percent from November but surged 117.52 percent year-over-year. However, REO properties did the opposite. Compared to November, REO properties increased 3.41 percent in December but plummeted 34.89 percent from the prior year.

Foreclosures that went back-to-bank declined 28 percent, and those that sold to third parties fell 41.8 percent. A significant decline in foreclosure discounting by lenders appears to be the reason for such a dramatic drop in sales to third parties, ForeclosureRadar said. For most of the last year lenders discounted the opening bid from the amount that they were owed by nearly 40 percent, but in December, that discount dropped to 33.7 percent. In addition, the percentage of sales that were discounted declined from nearly 90 percent in December 2008 to just 75 percent in December 2009.

* Learn like you are going to live forever; live like your going to die tomorrow.
* Punctuality is the courtesy of kings.
* If you are a fisherman don’t give your children fish, teach them how to fish.
* The young man knows the rules but the old man knows the exceptions.
* Be careful what you set your heart upon for it will surely be yours.
* Spend time with your mother; she is cooler than you think.
* Nothing good ever happens after 3:00am.
* Keep your word – reputations are won in inches and lost in miles.
* When you are going through hell just keep on going.
* On matters of style, swim with the current and on matters of principal, stand like a rock.
* Courage is not the lack of fear it is acting in spite of it.
* Hide not your talents. They for use were made. What’s a sundial in the shade?
* Courtesy is as much a mark of a gentleman as courage.
* When you greet a person look them straight in the eyes and shake their hand firmly and solidly.
* Remember first names.
* Be like a duck – remain calm on the surface and paddle like hell underneath.
* Don’t screen phone calls.
* Write thank you notes.
* Hold doors, pull out chairs and easy on the swears.
* Don’t confuse efforts with results.
* If you are a thoroughbred don’t train with donkeys.
* Practice random acts of kindness and compassion often.
* Upsets are usually caused by unfulfilled expectations – be clear with everyone on your and their expectations.
* You will find fulfillment by “pushing through comfort barriers” and obliterating the status quo.
* “Imua”- Hawaiian chant that means whether you know where you are going or not – go and go hard!

Thanks to Thomas J. Barrack, Jr. from Colony Capital, LLC

After the biggest housing boom and bust in U.S. history, prices of existing homes managed to increase by only 25% over the past 10 years, according to the National Association of Realtors. The Realtors reported that median home values rose from $137,600 in November 1999 to $172,600 in November 2009 or 25%. At the peak of the market, the median house price hit $230,300 in July 2006. The latest forecast by NAR economists shows that the median house price will rise 3.6% in 2010 to $178,900, after falling 12.8% in 2009. The economists expect existing home sales will rise 10.8% in 2010 to 5.71 million from 5.15 million in 2009.

DETROIT MAN TO BE SENTENCE ON FRAUDULENT PAPERWORK TRAIL

IN SALE OF CHURCH

Tracy Carmichael, 46, Detroit, Michigan was convicted after a 4 day jury trial in connection with a fraudulent scheme to obtain an over $149,000 mortgage on a church property located on 11731 Mount Elliot, Detroit. Carmichael was found guilty as charged of eleven felony counts: Embezzlement over $100,000; Forgery (4 counts), U&P (4 counts); False Pretenses over $20,000; and Money Laundering 2nd degree.

As previously reported on Mortgage Fraud Blog, between May and June, 2007, Carmichael allegedly offered to sell the Temple of God Deliverance Mount Elliot property to a female as an investment property. He represented that he would handle all of the paperwork, manage the property and give her the payments for the mortgage company. The victim later discovered that all documents conveying the property to her were false. The rightful owners never authorized Carmichael to sell the property and discovered their signatures were forged on the documents.

Assistant Prosecutor Abed Hammoud tried the case before Judge Ulysses Boykin of the Third Circuit Court Criminal Division. The defendant represented himself with the assistance of counsel Allan Saroki. Judge Boykin remanded the defendant and he is currently in the Wayne County jail awaiting sentencing on January 5, 2010.

This case was investigated and charged by the Wayne County Deed Fraud Task Force. The members of the task force are Register Bernard J. Youngblood

Home Prices Rise, According to FHFA Index

December 23, 2009

Home prices rose 0.6% in October and rebounded from a 0.4% decline in September, according to a house price index compiled by the Federal Housing Finance Agency. The index, however, only reflects homes funded by Fannie Mae and Freddie Mac loans. Regionally, the FHFA HPI registered a 3.7% jump in the Pacific states, which includes California. The Mid-Atlantic states ranked second with a 1.8% increase in house prices. The South-Atlantic region, which runs from Maryland to Florida, experienced the worst monthly performance with a 1.6% price decline in prices. FHFA bases its house price index on Fannie Mae and Freddie purchase mortgage transactions. Overall, U.S. prices are down 1.9% since October 2008, according to the regulator’s HPI. The FHFA index is 10.8% below the April 2007 peak in prices.

“Cash for Caulkers” could mean $12K per home

• By Steve Hargreaves, CNNMoney.com staff writer
• On 6:24 pm EST, Tuesday December 8, 2009

Cash for Caulkers could mean $12K per home
President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy.
The administration didn’t provide immediate details, but said it would work with Congress on crafting legislation. Steve Nadel, director at the American Council for an Energy-Efficient Economy, who’s helping write the bill, said a homeowner could receive up to $12,000 in rebates.
The proposal is part of the President’s larger spending plan, which also includes money for small businesses, renewable energy manufacturing, and infrastructure.
We know energy efficiency “creates jobs, saves money for families, and reduces the pollution that threatens our environment,” Obama said. “With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs.”
The program contains two parts: money for homeowners for efficiency projects, and money for companies in the renewable energy and efficiency space.
The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.
Big-ticket items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered, Nadel said.
Consumers might be eligible for a 50% rebate on both the price of the equipment and the installation, up to $12,000, said Nadel. So far, there is no income restriction on who is eligible. That would mean a household could spend as much as $24,000 on upgrades and get half back.
Homes that take full advantage of the program could see their energy bills drop as much as 20%, he said. The program is expected to cost in the $10 billion range.
It’s not clear how the home efficiency plan would be administered – the government may issue rebates to consumers directly, homeowners might get a tax credit, or the program could be run via state agencies.
If consumers have to spend a lot of money up front to get the credit, it could throw a wrench in the works, David Kreutzer, an energy analyst at the Heritage Foundation, told CNN.
“This will not be something that’s attractive to people who are having trouble already making their budget payments month to month or week to week,” he said.
To keep consumers from having to spend thousands of dollars before getting reimbursed, Nadel said, one idea is to have contractors or big box retailers pay part of the cost up front.
Fraud issues could also come up, Kreutzer said.
“Any program that is going to run through a third party and is going to distribute billions of dollars needs to have lots of checks and balances to make sure there’s not abuse,” he said.
Nadel noted that as a way to guard against fraud, contractors would have to be certified to participate.
Energy company boost
Obama’s new spending plan also calls for renewable energy companies to get additional support. That could come in the form of loan guarantees – basically, money the government uses to secure loans for startups.
In the original stimulus bill passed earlier this year, $6 billion was earmarked for such loan guarantees. But then lawmakers took away $2 billion to fund Cash for Clunkers – the popular program that paid people to turn in their old cars.
The $4 billion from the original bill has funded about $40 billion in loans, said the staffer on the Senate Energy Committee. Meanwhile, firms are hoping for another $4 billion in loan guarantees, since they have another $40 billion worth of projects that need funding.
A bill on energy efficiency reimbursements already has supporters in the Senate.
“Not only will [such legislation] increase our energy security and transform our energy infrastructure to a modern, clean and efficient one,” Senate Energy Committee Chairman Jeff Bingaman, D-N.M., wrote in a recent op-ed column in the Hill, a Capitol Hill newspaper. “But it also will position the United States to lead in the development of clean energy technologies.”

Refinancing Application Surge May Reflect Rate Rise Nudging Borrowers

An increase in the average 30-year fixed mortgage rate for the first time in over a month during the week ending Dec. 4 could be responsible for an increase in refinance applications during the period, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. A rate rise sometimes causes a rush to refinance as borrowers may see it as a sign rates are rising and they need to lock in immediately. A relative improvement in unemployment put upward pressure on rates Dec. 4. During that week, the MBA’s Market Composite Index, a measure of overall mortgage loan application volume, increased 8.5% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 54% compared with the previous week, which was a shortened week due to the Thanksgiving holiday. The Refinance Index increased 11.1% from the previous week and the seasonally adjusted Purchase Index increased 4% from one week earlier. The increase in purchase applications reflected a 10% increase in applications for government mortgages and a 0.2% decrease in conventional mortgage applications, both on a seasonally adjusted basis. The share of refinance activity increased to 74.4% of total applications, up from 72.1% the previous week. The adjustable-rate mortgage share of activity decreased to 4.7% from 4.8%. The average contract interest rate for 30-year fixed-rate mortgages, which for the previous week was at its lowest point since May of this year, increased from 4.79% to 4.88%, with points increasing to 1.17 from 1.00 (including the origination fee) for loans with an 80% percent loan-to-value ratio, the association reported. The increase ended a run of six consecutive weeks of decline in the average rate. The average contract interest rate for 15-year FRMs came off of its lowest point ever increasing by 6 basis points, to 4.33%. For one-year adjustable-rate loans, rates decreased by 1 bp to 6.55%. The MBA stopped disclosing index values with the July 31 data release. The MBA can be found online at http://www.mortgagebankers.org.

as reported in the National Mortgage News 12-09-09

Freddie: Rates Hit Another New Low
The weekly average for the 30-year fixed-rate mortgage that dominates the market had fallen again to yet another record low at 4.71%, according to the most recent Freddie Mac Primary Mortgage Market Survey. That average rate for a 30-year fixed-rate mortgage during the week ending Dec. 3 was the lowest seen since Freddie started tracking the rate in 1971. It was 4.78% the previous week and 5.53% a year ago. The average 15-year FRM rate, which Freddie has been tracking since 1991, also dropped to a new record low. It was 4.27% during the most recent week, 4.29% the previous week and 5.77% a year ago. In contrast, the average rate for a five-year hybrid Treasury-indexed adjustable-rate mortgage inched up during the most recent week to 4.19% from 4.18% the week previous. This rate was 5.77% a year ago. The average one-year Treasury ARM rate during the most recent week, at 4.25%, was higher than the average five-year rate during that time but down compared to the rate for the same type of loan the week previous. During the previous week, the average one-year Treasury ARM rate was 4.35%. A year ago this rate was 5.02%. Points in the most recent week were 0.7 for 30-year FRMs and 0.6 for the three other types of mortgages. “Interest rates for 30-year and 15-year fixed-rate mortgages fell for the fifth consecutive week to an all-time record low while the average rate on five-year Arms hovered near its record set in the previous week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “In addition, interest rates on 30-year and 15-year fixed mortgages thus far in 2009 averaged one percentage point below their respective average in 2008.”  These rates are average for Freddie Mac loans with a loan amount of  $300,000 or more for a single family owner occupied purchase or refinance with an excellent credit score.  Loan to value ratio is assumed to be no more than 80%.

Pending Home Sales Hit Highest Mark in More than 3 Years: NAR

The National Association of Realtors (NAR) said Tuesday that its index of home sales contracts is up yet again, representing the ninth straight month that pending sales have recorded a rise – the longest run of increases since NAR began tracking sales agreements back in 2001.

The trade group’s Pending Home Sales Index showed an increase in signed contracts of 3.7 percent in October compared to September.

Perhaps even more noteworthy is that the latest reading is the highest on record since March 2006 and is nearly 32 percent above October 2008. The rise from a year ago is the biggest annual increase ever posted for NAR’s pending sales index.

Although the pending home sales numbers don’t always turn into tangible closed transactions – according to NAR they’ve been thwarted as of late by new appraisal rules – we’re still exceeding what the association deems as customary stats.

Lawrence Yun, NAR’s chief economist, says based on the country’s demographics, existing-home sales should be in the range of 5.5 million to 6.0 million annually. Based on the trade group’s existing-home sales report last month, the industry is currently moving properties at an annual rate of 6.1 million.

According to Yun, the gain is primarily due to the federal government’s popular $8,000 tax credit for first-time buyers, seeing as how the annual sales rate was well below the 5-million mark before the homebuyer tax credit stimulus was passed.

“This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future,” Yun said.

Yun cautioned, though, that home sales could dip in the months ahead. “The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months. Given the lag time, we could see a temporary decline in closed existing-home sales from December until early spring when we get another surge,” Yun explained.

Yun projects that as inventories continue to decline and balance is gradually restored between buyers and sellers, housing conditions will become self-sustaining and prices in most areas will begin to stabilize around the middle of 2010.

FHA to toughen rules for borrowers
FINANCES, RISK AT ISSUE
Borrowers would need ‘more skin in the game’

By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, December 2, 2009

The Federal Housing Administration is proposing to
increase the up-front cash paid by borrowers as part of
an effort to shore up the agency’s finances, which have
been staggered by rising defaults in its flagship
mortgage insurance program, according to FHA
officials.
The changes also include raising minimum credit scores for borrowers who receive FHA-backed
mortgages and limiting the amount of money sellers can kick in, including paying closing costs or
giving free upgrades.
These measures are designed to increase the amount borrowers invest in the homes they buy, thereby
making it less attractive for them to default on loans and walk away from properties, as many people
have done during the current housing crisis.
Housing and Urban Development Secretary Shaun Donovan is scheduled to announce the agency’s
policy changes when he testifies Wednesday before the House Financial Services Committee.
The FHA has played a critical role in propping up the housing market by insuring lenders against default
after the mortgage market unraveled. Currently, the agency backs about 30 percent of all loans for home
purchases and 20 percent of refinancings. In the past, the FHA has resisted raising down payments or
insurance premiums for fear of shutting out qualified borrowers and stunting the housing market’s slow
but steady recovery.
But Donovan plans to tell the House committee that the exploding volume of loans the FHA is now
handling requires stricter risk controls than the previous administration had in place, according to a copy
of his prepared testimony. A recent audit shows that the FHA’s financial cushion already has eroded
below the level required by law.

“We’ve learned from recent history that the market is fragile, and we have to plan for the unexpected,”
Donovan’s prepared statement says. “That uncertainty is complicated by an organization we inherited
that, to be honest, was simply not properly managing or monitoring its risk.”
By requiring that borrowers bring more cash to the table, the agency is seeking to ensure they have
“more skin in the game and a stronger equity position in their loans,” Donovan says. But he does not
specify the size of the proposed increase. FHA officials said they have yet to determine how much cash
will be required.
“There are several ways to accomplish this, and so we are currently analyzing various options to
determine which is the most effective and consistent with our mission,” Donovan says.
Up-front cash can include down payments as well as other payments. For now, FHA borrowers can put
down as little as 3.5 percent, a level that many FHA critics say is too low. One lawmaker has introduced
legislation that would boost the minimum down payment to 5 percent.

As for seller concessions, the agency now allows sellers to kick in 6 percent of the home’s value.
Donovan said he wants the maximum permissible level to be lowered to 3 percent, in line with industry
norms.
Agency staff are reviewing whether to increase the monthly insurance premiums charged to borrowers,
officials said. These payments come on top of insurance paid up front.
The current up-front premium is set at 1.75 percent of the value of the loan. FHA may decide that an
increase in that premium is needed also, officials said.
To protect itself against the riskiest borrowers, the agency has decided “for the time being” to raise its
minimum credit score requirements for new borrowers. Again, FHA staff are still analyzing what the
new threshold should be, Donovan’s prepared testimony says.
The minimum credit score requirement is now so low — 500 out of a possible 850 — that it’s basically
irrelevant. Many lenders that make FHA-insured loans impose much tougher restrictions. The concern is
that if FHA does not toughen up, abusive lenders will get away with financing risky, poor credit
borrowers already rejected by more reputable lenders.
Most of the new initiatives do not require congressional approval. Many have previously been suggested
by critics and even supporters of the agency.
These measures are meant to build on other actions the FHA has taken to curb its risk and beef up its
eroding cash reserves.
An audit released last month found that the agency’s cash reserves have shrunk to a level far below what
is required by law, and the agency could need taxpayer funding if worst-case scenarios play out.
The audit, designed to measure the agency’s financial health, examined the excess cash the agency must
set aside to deal with unexpected losses and found that those reserves were at about $3.6 billion as of
Sept. 30, a drop from the $12.9 billion available a year earlier. The current total represents 0.53 percent
of all outstanding single-family-home loans insured by the FHA, well below the 2 percent threshold set
by law. This is the first time reserves have fallen under that level since 1994.
To stop the financial erosion, the FHA has focused in part on weeding out abusive lenders. This year,
the agency has suspended business with seven lenders, including the now-defunct Taylor, Bean and
Whitaker. It has withdrawn FHA-approval for 270 others, including Lend America. On its Web site
Tuesday, Lend America said it has ceased its loan origination and operations, effective immediately.
The FHA is currently working on a new rule that would require banks it does business with to have up to
$2.5 million in capital that they can use to repay the agency for losses if they were involved in fraud.
Now, they are required to hold only $250,000.

On Wednesday, Donovan will ask Congress to grant the agency more authority to close down abusive
lenders.